Proposal to improve the Governance Structure

  • Hello, I kindly ask you to consider my suggestion for the Governance bounty.

    1. In short:

    Lack of initiative to vote for SBP’s creates a risk for the Vite Ecosystem - a simple change in voting mechanism would greatly migrate this risk.

    1. Situation:

    People that hold are able to vote for SBP’s who play an essential role in the Vite ecosystem. The Voters are rewarded with a share of the rewards the SBP’s gain. The weight of the vote is determined by the number of Vite the voter has in his/her wallet. The voting reward is somewhere between 0.001 and 0.009.

    The alternative to voting is staking. With staking you gain VX for the number of Vite you have staked.

    1. Problem

    The return on voting is so much lower compared to the return on staking (10x - 50x) that it would make no sense for a rational investor to vote. In that he/she could simply stake and sell the vx he/she is rewarded for more Vite.

    1. Risk

    Due to the lack of votes it is relatively cheap to become a top 5 SBP without the need of any support from the community just by voting for yourself with an other account. That means that a well willing SBP gets out of the top 25 list as a result. Now considering a coordinated attack in which about +/- $500k is sufficient to create enough SBP’s to take over 90% of top 25 SBP’s...

    1. Solution

    The root cause of this problem is that the Vite holder has to choose between voting or staking. The solution I purpose is changing the voting power from (#vite in wallet) to (#vite in wallet + #vite staked). That way Vite holders can choose between voting reward while have liquid funds or having illiquid funds but earn higher rewards.

    By doing this the number of votes cast will greatly increase (more then 100m vite are currently staked) which greatly increases the costs of such an attack and thereby reducing its attractiveness.

    Please let me know what you think and feel free to ask any questions if any clarification is needed.

    ~ Michi

  • Thanks @Michi ! We'll consider this

  • @Oleg hey Oleg, is there any update on the consideration?
    Kind regards!

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